Dr Gareth Goodier is not too impressed by how England's NHS handles its finances. The chief executive of Cambridge University Hospitals foundation trust says that only about a dozen hospitals have a "detailed handle" on patient level costings, and that this makes it more difficult for them to manage themselves efficiently.

This is partly due to a lack of innovation, with organisations not having the right tools in place to see how much they are spending on things such as blood tests, drugs and time spent in theatre.

The consequences are becoming more difficult to ignore. Goodier warns that without having a mechanism in place that visibly shows trust performance in key areas, they will not be able to identify where improvements need to be made. This will make it more difficult for the health service to achieve the £20bn worth of efficiency savings over the current parliament demanded by the government.

"The truth is that the NHS has been managing blind for a very long time and it is only in the very recent years that we've started to understand how we spend a hundred odd billion pounds," explains Goodier.

His trust, which runs Addenbrooke's hospital with more than 1,000 beds, has experience in trying to better understand its finances. Goodier says that when he arrived in 2003 the NHS was spending £60bn a year without its finance directors knowing exactly how much certain services cost. "You wouldn't run a corner shop like that, let alone spend £60bn," he says.

Since then the trust, which has spends around £550m annually, has brought in specialist software from Qlikview that details its spending and provides performance data for individual wards and employees. The tool pulls in data from multiple sources and displays relevant information to staff in a read only format.

Goodier, who has been heavily involved in IT projects throughout his 35 year career, calls the move "a balanced scorecard approach to healthcare". The trust's financial team, which uses a standard Oracle system, put its financial details through the Qlikview tool to scrutinise its spending.

"We have cost against everything so you end up with what I would liken to a hotel bill," Goodier says. "You ask any private hospital if they could run without knowing what the costs were at the level of the patients, because their bills and their charges would reflect the costs."

He argues against the "huge difference" in how the public and private sectors view their finances. By regularly monitoring its performance across six domains including costs, financial information, NHS metrics, staffing and HR, patient satisfaction and activity versus capacity, the trust has made significant savings equivalent to more than 25% of its bed capacity.

Cambridge's approach has caught the attention of government ministers, and Goodier says that a top treasury official told him that the trust's use of its business intelligence system was the best he had seen.

"I think they all say 'Well, great,' but the question is how do you disseminate that to a broader audience?" he says.

He adds that the trust's way of working could be applied to other hospitals, and that IT is not the most important component if a trust wants to improve its performance. "You have to have a clinically led organisation, you have to have clinical managers that are empowered and who can make decisions and lead their teams, and you have to focus upon quality."

Cambridge is now outlining a business case for a total refresh of its IT to replace its "pretty average NHS systems", which Goodier says may involve between £20m and £40m worth of investment.

"Some of our systems are getting to the point where they won't be supported any more in the next two or three years. So this (business intelligence system) sits upon cast iron steam driven IT. Some of the IT guys get a bit sensitive about that, but this is not flash infrastructure."

He suggests that implementing an effective system has as much to with people and their mindsets than it does with technology, and that it is not dissimilar to some hospitals being frightened of publishing information in case it is inaccurate.

"But I believe get it out and they will criticise it and then you will improve it and so on," says Goodier.